I will share the lessons from a “failed trade” that almost wiped out my account right after I nearly tripled my funds!

Hello to all traders, good evening!

This Christmas, due to Brexit-related news, the GBP rose quite a bit, didn’t it?

I had decided to take the 24th as a “trading break day” and went out, so I couldn’t ride the rising wave (´；ω；`) Uuuu

Next year, depending on the situation, I plan to have a schedule on the 25th and monitor the market on the 24th. Haha

This time, I will write about a failed experience where I almost wiped out my account the day after the successful example mentioned in the previous article.

...Honestly, writing this is incredibly embarrassing. Haha

However, I aim to leave behind the journey of how a beginner becomes a billion-trader on this Investment Navi+ so that someone will think, “If this person could do it, so can I,” and I plan to write honestly.

—Contents—

1. A trade published right after achieving nearly triple the funds on 12/22, nearly wiping out the credit

2. Mental reflections and measures to avoid repeating it

3. Trading techniques reflections and measures to avoid repeating it

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1. A trade published right after achieving nearly triple the funds on 12/22, nearly wiping out the credit

(Note: I initially deposited 10,000 yen and received a bonus credit of 15,000 yen. Basically, I consider the changes relative to the amount I deposited.)

First, let’s review trades that gradually increased the account close to 3x as planned.

There was one time when I failed to cut losses after a break in the basis, resulting in a loss of 18.6 pips, but afterward I realized it was in a range, and I managed to enter a short at the range high, right?

This, based on a horizontal-line rationale, seemed like the best decision I could make at that moment.

(By the way, the reason for the -18.6 pips loss in this failed trade was “jumping in” entry.Decide your stop-loss position and take-profit targets, and confirm their risk-reward before enteringto graduate from gambling trading.)

Originally, with a balance of 24,242 yen, I was satisfied to increase by 17%, and I decided to wrap up today’s trades here, logging pips in the management sheet and ending it here, beginning to keep records.

Next, I will reflect on a trade I decided to close 30 minutes later that reduced funds to a negative.

I didn’t notice I had exited the range, believed price would return to the previous high, and continued to buy even as the price declined.

The market does not move according to one’s will—that is a constant truth, but I scrambled to ensure today’s profit (4,084 yen) wouldn’t decrease.

In my haste, I increased my lot size from 0.1 to 0.9, causing losses to balloon rapidly.

Now, based on this trade, let’s review the reflections and measures to prevent recurrence.

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2. Reflections on the mental aspect and measures to avoid repeating them

First, I’ll outline the mental sequence of events to understand why this happened.

・Decide to close out (Not achieving 20% win rate, but I’m satisfied! It’s a tough market, so I’ll close here)

・Enter again (After all, about 700 yen seems achievable at the end… if I trade 0.2 lots, 4 pips would do, so I’ll enter a little more!)

! Reflection Point ①!

・Increase buy after a 3 pips loss (Ah, perhaps it wasn’t the low yet. Then I’ll add more)

・Even though the first entry lost 11 pips, I add another 0.5 lots (Huh, something’s off, it shouldn’t rise like this.To recover, I’ll buy here and then make the previous two losses + if I cut losses earlier)

! Reflection Point ②!

・After finally cutting losses on three losing entries, I short again, and even after cutting losses again I stubbornly short once more (If it continues to fall, I should enter now to regain some)

! Reflection Point ③!

ーーーー

Looking at these points, the psychology after losing from Point ② onward is quite dangerous.

First, Reflection Point ① is choosing to close as decided, but entering again with a light feeling like “just a few hundred more yen” was a mistake.

Interestingly, when one thinks “a little more” or “one more win,” it often goes against you and you incur losses.

Endure a little longer and close properly, endure a little longer and take profits earlier—this is the mindset and self-discipline that are crucial.I learned this.

Until now, I recorded daily P/L and pips in a spreadsheet after trading, but as a system to prevent “trades entered after deciding to close,” I decided to postpone recording until the next day after closing, and to turn off the PC.

When I’m feeling on a roll, I tend to think “I’ll win this time too,” so I created a rule to physically prevent trading by turning off the PC. Haha

Next, Reflection Point ② is disregarding context and desperately trying to make up for losses.

When you are losing, you often fall into a mental state where you cannot judge properly, and you can’t wait or assess the environment calmly, right?

（Huh, something’s off, it should rise.）This expresses the uncertain mental state. Since I started real trading, I’ve never experienced this before, so I had no countermeasures and followed the losing path.

However, (this is my case) if I can calm down once, I can judge normally.

So from now onWhen you lose, first cut your lossesand close the PC and drink water in the kitchen.

This is another measure to restore my mental state!

Whether it works well or not, I’ll report in a future article.

Finally, Reflection Point ③ is being swayed by price movement, going short→long→short.

Swaying with price movementwithout any basis becomes pure gambling. To be a real trader, isn’t it essential to trade with a well-founded scenario?

I realized that even though I practiced with backtesting tools, I cannot always enter with a well-founded basis in real trading yet.

This time, although fear of losing affected me, I plan to implement a checklist before entering to be able to trade with a scenario that has a solid basis.

The contents of the checklist are as follows:

☑ Where is the supporting horizontal line?

☑ Is the stop-loss placed where the basis would break?

☑ Where is the take-profit target (what is the profit factor)?

☑ For longs, is it entered at the low; for shorts, at the high; if range-bound, at the range’s high/low?

I haven’t yet tested whether this covers all reflections, but to habituate, I’ll make this a compulsory check.

This chapter covers reflections and measures on the “mental” aspect.

If you have any “countermeasures” for these three reflections, please feel free to share in the comments. (o^―^o)

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3. Reflections on trading technique and measures to avoid repeating

Finally, I will reflect on the technical side. Here is what was summarized in my trading notebook.

・I only looked at the 1-minute chart to enter.

・Even after exceeding the stop-out level, I did not cut losses and even added more.

・I entered long at the peak.

・In a market where it’s hard to tell which way it will move, I entered and did not exit with a small profit, believing it would rise more.

・While holding a position, I looked at LINE and missed the timing (a flaw in technique!!)

Looking at these points, it’s obvious to anyone that I was in a losing state.

・First, looking at only the 1-minute chart meansmy market awareness was weak.

Since proper market awareness and scenario-based entry are essential rules, I will use the checklist I just decided on to habitually apply them.

Everyone, are you able to build a scenario with a solid basis?

・Not being able to cut losses can stem from not having a scenario. FX is not a guaranteed win, so the decision of where to exit when you lose—the “stop-loss positioning”—has become crucial, as I realized this time.

・Entering at the peak happened because I hadn’t created a scenario for “breakdown from the range.”

In the second image, the purple horizontal line was the width of the previous range, but I longed at a high that just dipped under that level.

If I had anticipated the range breaking down, I could have cut losses when it moved against me.

As with earlier reflections, the key remainsto build a solid scenario.

(Note here: saying “scenario” with words alone to predict “rise” or “fall” is meaningless. A scenario is about identifying which horizontal line, under what conditions, and which direction would trigger entry and exit according to that plan. It’s important not to be misled by words.)

・In an uncertain market, not entering is a fundamental rule.

This time, in an attempt to recover losses, I entered without understanding, which is more about rules than technique, but“Do not enter in uncertain areas; enter only where you have confidence”is a rule I must follow.

Also, when you enter in an uncertain area, you should always take small profits. Entering in a place you don’t understand and then turning positive is just luck at best.

If a trade is a loss but still yields a profit, I resolved to promptly take small profits; otherwise, it may reverse and hit stop-loss again…!

・Lastly, the absolute worst and quite basic mistake: while waiting for a move that is certain to rise, doing other tasks in the meantime is not acceptable for a beginner, especially when you don’t know which way it’s going.

I entered with money I deposited thinking it can be wiped out, but that money should not be treated casually.

I decided to stop checking LINE on the PC while holding a position to apply this reflection.

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That was the reflection and summary of a big failed trade!

Have you ever had experiences like this?

I’ve heard that winning traders have also faced failures and wiping out funds in the past, but since they share these experiences, I’d like to avoid repeating the same mistakes as much as possible.

Next time I publish results, I’ll aim to increase the funds several times over and introduce that method, so I’ll stay focused for the last three days of year-end and face the market firmly!

If you read my failures, I hope you’ll experience a simulated learning and prevent these mistakes.

Thank you for reading until the end this time as well.

See you in the next article!

Izumisuko